Petroleum association joins call for Malampaya license extension

The Petroleum Association of the Philippines (PAP) is just the latest group adding its voice on the call to government to decisively act on the Malampaya gas field project’s license extension.

In a statement to the media, PAP Chairman Rufino B. Bomasang noted that it already came to a critical point that the Philippine government must take concrete step on this matter given the series of yellow and red alert conditions being experienced in Luzon grid.

It has to be emphasized that the gas-fired plants powered by Malampaya account for about 30% of the power requirements of the country’s power grid.

“The recent spate of brownouts underscores the need for our country

to focus on energy security or our self-sufficiency in energy by being able to draw from our own power stores instead of relying on global markets,” Bomasang said.

The field operator led by Shell Philippines Explorarion B.V. (SPEX) lodged its 15-year license extension application with the Department of Energy (DOE) as early as 2012 - but it was not acted upon by the previous administration.

But as power supply situation in Luzon teeters on very precarious state, the bid for the gas field’s extended operations is being pushed anew.

Bomasang said the Malampaya field had somehow stepped up on helping satiate the country’s power supply in the series of yellow and red alerts inflicting Luzon, “otherwise, the power shortage would have been much worse, and the brownouts would have been longer and more frequent.”

SPEX sounded off that the country’s commercial gas field’s life cycle may still be stretched until 2030 at the scale of production that could satiate the needs of the 3,200 megawatts of gas generating fleets in the country.

The energy department previously indicated that it has been studying three options on the portended Malampaya license extension: one is for government to takeover operations; tap a third party Operation and Maintenance (O&M) contractor; or for the State to increase its stake that would equal that of Shell and Chevron.

At the same, the department is contemplating on the hiring of a third party consultant to validate the additional gas reserves being dangled by the Malampaya consortium.